Home Courts Slave reparations tax fraud scheme nets $1.2 million fine, prison

Slave reparations tax fraud scheme nets $1.2 million fine, prison

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A former Poughkeepsie resident was sentenced on Friday to 18 months in prison and ordered to pay nearly $1.2 million to the IRS for running a slave reparations tax fraud scheme.

Damyon Shuler, 48, had pleaded guilty to two counts of filing false tax returns but he admitted to actually filing 30 phony returns that claimed more than $1.6 million in tax refunds.

“I was in a serious money crunch,” Shuler said in a letter to U.S. District Judge Nelson S. Roman, “so I made a very bad decision again to make money quick.”

slave reparation taxes tax fraud schemeShuler was desperate because he had lost his job as a telephone operator at a call center. Finding another job was difficult because he was a felon, having been sentenced to prison for three years in 1999 for distribution of 19 ounces of crack cocaine.

Shuler learned about the tax scheme from on online chat room discussion that claimed the government had promised to pay African-Americans reparations to make amends for the slavery of their ancestors.

He used the scheme on his own tax return in 2010, according to the indictment, to claim a $46,685 refund.

Then he convinced family members and friends that he could get them refunds.

He charged $4,000 to $5,000 to prepare tax forms but concealed his role by not disclosing that he was a paid preparer.

The scheme apparently stopped in 2011, when he found a job as a truck driver for the U.S. Postal Service and then for FedEx.

He has since moved to Orange City, Florida.

His attorney, Rachel S. Martin, asked the court for a prison sentence of 1 year and 1 day and one year of supervised release.  She described his upbringing as the youngest of six children in a solid working-class family. He lived in Peekskill for most of his childhood. His father owned an auto repair shop in Ossining and his mother worked in a laundry facility.

In 1999, a beloved 3-year-old niece was killed in a house fire. Shuler, his attorney said, was “psychologically destroyed.”

He found work as a disc jockey and recording engineer and helped raise two daughters.

Shuler accepts full responsibility for his crime, his lawyer said in a sentencing memorandum. He agreed to repay $1.2 million, the amount paid out in illegal refunds that has not been recovered.

She asked the judge to also consider “his lifetime of strong parenting and his steady work history during much of his adult life.”

The government asked for a 33- to 41-month prison sentence and a period of supervised release.

Shuler was “solely motivated by greed,” said Assistant U.S. Attorney Olga Zverovich in a sentencing memorandum.

Because of people like Shuler, she said, noncompliance with the tax code costs the Treasury hundreds of billions of dollars annually.

She said Shuler should be imprisoned for a significant term to convey the message to others who want to cheat on taxes that they “will be met with harsh punishment.”

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